(June 2, 5:40 p.m.) Seeking to cut $5 million in expenses from the U.S. Department of Agriculture’s Fresh Products Branch by April 2009, Agricultural Marketing Service on May 29 disclosed plans to shut down five federal market inspection offices and cut staff at 11 other field offices.

The cuts are necessary to prevent eventual termination of the industry-funded program because user fees have not kept pace with program obligations.

The five offices that the USDA proposes to close include Salt Lake City, (already closed and now being serviced out of Los Angeles); El Paso, Texas; Buffalo, N.Y., Memphis, Tenn., and Pittsburgh.

Leanne Skelton, chief of the AMS fresh products branch said the moves are designed to achieve permanent annual reductions of $5 million in operating expenses.

The 2008 fiscal year projected expenses for the Fresh Products Branch is $23.5 million and revenue is anticipated at $20.8 million. The Fresh Products Branch reserve is about $10.5 million, AMS spokesman Jimmie Turner said.

The closings would leave 17 offices unchanged in staffing; 11 other offices would lose one or two commodity graders, Skelton said. Three offices would gain one commodity grader because the workload demands it, she said.

“We looked at it as a business decision, based on the financial condition of each office and potential for future business,” Skelton said.

She said the USDA is considering whether part-time employees or contractual relationships with a group of industry members could extend the presence of federal inspectors in the markets that could lose an office.

Skelton did not list the 11 offices that will see reductions in staff of commodity graders.

“We don’t think there will be much impact at in terms of reductions of service or timeliness (at those offices),” she said.

At the Fresh Products Branch headquarters, proposed staff cuts include information technology functions, field operations section staff and a merging of the grade standardization section and the training section staffs. Other reductions are planned, Skelton said.

In all, about 14 positions could be cut from headquarters staff and 39 positions may be cut from field positions; Skelton said some of those reductions have already occurred through attrition.

Skelton said the plan needs to be approved by the USDA, which is anticipated.

Robert Keeney, deputy administrator for the AMS fruit and vegetable programs, said the industry understands the reasons for the restructuring.

“We have assured them that the offices that remain open will maintain the services we are providing, and in the offices we are closing down, we are attempting to maintain some level of service to carry on that service.”

Skelton said she anticipates no industry fee increases for 2008 and 2009.